Investing In China Is Now ‘Risky Business,’ Raimondo Says
Aug. 30, 2023—Commerce Secretary Gina Raimondo completed a four-day visit to China this week as part of a diplomatic effort to smooth economic relations between the world’s largest economies.
The challenge for Raimondo and President Joe Biden is coordinating a new approach to China amid a shift in sentiment away from trade liberalization. Adding to the challenge for U.S. diplomats are China’s state control of the economy, tense foreign relations, and a tougher environment for U.S. businesses practicing in China.
Raimondo told reporters she raised concerns about theft of intellectual property, raids on businesses, a new counterespionage law, and extreme fines under that law.
“Increasingly, I hear from businesses China is uninvestable because it has become too risky,” Raimondo said.
For China, the talks come amid signs of a weaker economy and declining trade, due to fewer sales to the United States and Europe.
Biden Administration Visits
Raimondo is the fourth senior Biden administration official to travel to China in three months. Her visit follows one by Treasury Secretary Janet Yellen in July, Climate envoy John Kerry in July, and Secretary of State Antony Blinken in June.
The trips are seen as leading up to a potential meeting between President Biden and Chinese President Xi Jinping later this year.
The Asks
Raimondo met with Premier Li Qiang, Vice-Premier He Lifeng, Commerce Minister Wang Wentao, and Minister of Culture and Tourism Hu Heping.
On the U.S. side, the goals are collaboration on AI, climate change, and the fentanyl crisis. China, meanwhile, wants the U.S. government to reduce export controls on advanced technology, including an executive order on bans of new investments in advanced technologies, and a return to free trade.
It’s noteworthy that the U.S. Bureau of Industry and Security, a branch within the U.S. Commerce Department, lifted export controls on 27 Chinese entities just prior to the Secretary’s trip.
Technology was by far the most sensitive area of trade discussions.
The Outcomes
It seems both sides want smoother economic relations. The U.S. and Chinese trade ministers agreed to do the following:
- Meet in person at least once a year;
- Establish a U.S.-China working group for commercial issues that meets twice a year at the vice-minister level;
- Develop an export control information exchange.
Moreover, Raimondo discussed promoting tourism and people-to-people interactions with her Chinese counterparts.
China’s Ministry of Commerce issued the following statement.
“The two sides had rational, candid and constructive communication on China-U.S. trade and economic relations and issues of mutual concern, with the aim of implementing the important consensus of Chinese and U.S. presidents during their meeting in Bali, Indonesia last year,” China’s Ministry said.
Raimondo, meanwhile, said talks went fairly well.
“The world expects our two countries to work together,” she said, according to a story in the Associated Press. “That was met with some receptivity.”
